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3 Reasons the Claim “Half of Americans Don’t Pay any Income Tax” is Bogus

In a recent post, a comment was made by ‘Chris,’ who makes the claim, “nearly 50% of Americans… do not pay an income tax.” This line has become a standard talking point for right-wing politicians, pundits, and Fox News enthusiasts. It has been circulating for a couple of years now, in part because it is ‘true’ (yes, the claim is technically true, not denying that), but also because it plays into the conservative narrative that the downfall of this country is due to free loaders who are dependent on government.

The first problem with this line is many times it leads to people, sometimes ‘important’ people like Sean Hannity, claiming that half of Americans pay no taxes at all. That is just patently untrue – simply red meat for his conservative base.

This leads to a second problem because implying a certain group of people do not pay any taxes only perpetrates the belief that those in poverty just want handouts and are not paying their fair share. This false belief turns a blind eye to the fact that there are more taxes than just the income tax. The income tax happens to be a very progressive tax. So it does not affect low-income people as much as high earners, but by no means does it follow that they do not pay their fair share.

This graph shows the effective tax rate paid by each income group. We see even those at the bottom still pay an effective tax rate of 17.4 percent. Yes, higher earners pay more (not by much), but the idea that low-income people are free loaders is simply not true. Further, if you take into consideration the past few decades where those in the top income bracket saw their income rise by close to 275 percent, while others only saw modest income growth begs the question as to who is really not paying their fair share.

Third, this claim also seems to purport those not paying income tax are either not working or somehow cheating the system. Both of which are untrue. A large group of those not paying any income tax are the elderly. Their main source of income is Social Security, which is not taxed as income. The other main reason 48 percent of people do not pay any income tax is because they are living in poverty and do not earn enough. The various exemptions and deductions all people receive make their income tax rate zero.

These are not people who aren’t working or cheating the system. In fact, according to Lindsey Graham, ‘It’s really American to avoid (paying) taxes.” Full Disclosure: That quote is taken out of context. What he meant was that it is American for rich people to avoid taxes, but for the less fortunate, avoiding taxes is being a free loader.

That’s really the issue here; Republicans demonize the poor while putting the rich on a pedestal. They use this line as evidence the rich are already supporting the lower class through high taxes and taxing them more would be economic suicide. Republicans want us to believe that hiding and sheltering income to avoid taxes is patriotic, but when low-income households use standard deductions to decrease their tax burden they are leeches on society. It’s interesting we never hear about the 20,000 plus Americans who make over $200,000 a year and pay zero in income tax. That’s because those are the ‘job creators’ and we don’t attack them.

Paying taxes is about paying your fair share – both parties believe that. Republicans are just going after the wrong group of people.